1 2 3 4 Trustpilot 2 3 1

Refinance My Car

My monthly budget is

Rates from 8.9% APR. Representative APR 14.9%.
Car Finance 247 Limited is a credit broker, not a lender.
ford fiesta

*Car Finance 247 runs a soft credit check for your quote (no impact on your score). If you proceed, a hard credit check is required which may affect your score.

Rates from 8.9% APR. Representative 14.9% APR. Hire Purchase (HP) Example: Borrow £12,000 over 5 years with a £0 deposit. Representative APR 14.9% fixed rate. Monthly payment: £279.03. Option to purchase fee £10 payable. Total cost of credit: £4,751.80. Total amount repayable: £16,751.80.
Car Finance 247 Limited is a credit broker not a lender.

Rated 'Excellent' by our customers

Car refinancing: What is it and how does it work?

Refinancing your car involves taking out a new finance agreement to pay off your existing loan. This means switching to a new lender and securing a deal with different terms.

When you refinance a car, your outstanding settlement figure will be settled with a one-off payment

Why do people usually want to refinance their vehicles? 

The main reason will be to keep their current car. When you take out a Hire Purchase (HP) or a Personal Contract Purchase (PCP) deal, you'll commit to making monthly repayments for a set period. Every deal is different, but it could be anywhere from two to five years.

However, things can change over time and a loan that was originally right for you may not be the best option for you anymore. 

Maybe your credit score has improved, and you think you could get a better interest rate? Or perhaps your expenses have increased, and you’d like a lower monthly repayment? You may have taken out joint finance but now need a loan that’s just in your name. Or, you may have reached the end of your PCP agreement and need finance to cover the balloon payment?

In all these situations, refinancing your car could help!

Here at Car Finance 247, we work with a wide panel of lenders, some of whom can offer refinance loans. We’ll always look to find you the best deal from our panel of lenders. 

Get your quote today to see what sort of deal you could get!

Get your no obligation car finance quote in 60 seconds

Why should I refinance my car?

Are you wondering whether a refinance loan is right for you? If your circumstances have changed, refinancing your car could be a great solution. 

Let’s take a look at some of the main reasons people tend to refinance their cars.

   

Looking for lower monthly repayments?

 

One of the main benefits of refinancing is that you may be able to find a car loan with lower monthly repayments. If your credit history is strong and you feel you can get a more attractive interest rate, there’s no need to wait until the end of your agreement. 

Instead, you can swap to a loan with cheaper monthly repayments and a longer repayment period. However, please be aware that spreading the cost of the loan over a longer period will increase the total amount repayable so ensure that this is the right option for you.

 

Settle your balloon payment

 

Refinancing is also a preferred option for people coming to the end of a PCP agreement. To keep the car at the end of the contracted term, you’ll need to pay the balloon payment. Taking out a loan to split this one-off cost into manageable monthly repayments could mean you can keep a car you’d otherwise have to hand back to the lender. 

But there are other things you need to keep in mind when refinancing your current car finance. Switching to lower repayments might not be good value in the long term, and you should always take note of the total amount payable on the loan. 

If you’ve chosen lower monthly payments but a longer loan term, then you could end up paying back more money overall.

  

How does refinancing a PCP balloon payment work?

 

When you come to the end of a PCP agreement, you have a few options available to you. You can hand the car back, use any positive equity as a deposit for a new agreement, or pay the balloon payment to own the vehicle. The balloon payment is usually a lump sum that represents the current value of your car. It can be a substantial sum - particularly if you've gone for the minimum monthly repayments. And a balloon payment of thousands of pounds can be tough to pay off in one go.

That’s where refinancing comes in. You can take out a new loan to break the one-off cost of a balloon payment down into more manageable monthly repayments.

But don’t forget, taking out a refinance loan to cover your balloon payment will mean paying interest, so you’ll end up paying more to buy your car than you would’ve done if you’d paid the balloon payment in one go.

Refinance Calculator

£
£3,000£200,000
£
Term
Finance type
Vehicle price£10,000.00
Deposit£1,000.00
Amount to finance£9,000.00
APR
11.9%
Option-to-purchase fee£10.00
Total cost of credit£2,227.55
Total amount repayable£12,237.55
48 monthly payments of£233.91
Rates from 8.9% APR. Representative APR 14.9%.

Rates from 8.9% APR. Representative 14.9% APR. Hire Purchase (HP) Example: Borrow £12,000 over 5 years with a £0 deposit. Representative APR 14.9% fixed rate. Monthly payment: £279.03. Option to purchase fee £10 payable. Total cost of credit: £4,751.80. Total amount repayable: £16,751.80.
Car Finance 247 Limited is a credit broker not a lender.

Refinance a PCP balloon payment

When you come to the end of a PCP agreement, you have options. You can hand the car back, use any positive equity as a deposit for a new agreement, or pay the balloon payment to own it. The balloon payment is usually a lump sum that represents the current value of your car. It can be a substantial sum. And a balloon payment of thousands of pounds can be tough to pay off in one go.

That’s where refinancing comes in. You can take out a new loan to break this one-off cost down into more manageable monthly repayments.

But don’t forget, taking out a loan to cover your balloon payment will mean paying interest and so you’ll likely end up paying more to buy your car than you would’ve done if you’d paid the balloon in one go.

Get your no obligation car finance quote in 60 seconds

Refinance a car with bad credit

Thanks to our panel of lenders, we can look to help people with a variety of different circumstances to refinance. Just because your credit rating could do with some improvement, it doesn’t mean you have to give up on the idea of getting a new deal.

The same applies if you’re in negative equity. This happens when your car has depreciated (lost value) more quickly than expected and you owe more on the loan than the car is worth. You can still find finance when you’re in negative equity, but your new loan will be based on the amount you have left to pay rather than the car’s new worth. This could limit the number of lenders available to you and may affect the interest rate you’re offered. 

How to refinance a car

Whether you’re looking to get a better deal, to reduce your monthly repayments or finance a balloon payment, we could help!

It all starts with a quote. If you’re approved in principle, your dedicated account manager will give you a call to talk through your options. No strings attached. They can answer any questions you have about your existing loan and how your refinance deal will work.

From our expert
“Refinancing your car is a great option if you're looking to lower your monthly payments or secure a better interest rate. This also gives you the ability to keep your current car.”

Why come to us for car finance?

A helping hand

At Car Finance 247, used car finance is all about helping people improve their everyday lives. We understand that building a good credit score isn’t always easy, and we believe that people should not be penalised for past mistakes. Unfortunately, some individuals find themselves trapped in a cycle, hindered by the lack of a vehicle, impeding both their commute to work and their ability to improve their credit score.

Dedicated account manager

Plus, you’ll have a dedicated account manager on hand to help guide you through the process, so there’s nothing to worry about.

Finding you the best deal

Whether it’s sorting out the school run, getting that big boot for the big shop, or a car you’re proud to park outside the office, we’ll work to find you the best deal from our panel of lenders, even if you have bad credit.

Making car finance simple for 450,000+ customers

Video Thumbnail
It was stress-free, really helpful and I would definitely recommend
Hannah Bought a Fiat 500
Very good customer service, very quick and simple. Definitely would recommend using them, very happy
Molly
Video Thumbnail
It was a pleasant experience, I'd recommend them to anyone
Michael Bought an MG HS
It was so easy and hassle free, most of it done over WhatsApp which was really good for me with working long hours. And the staff were fantastic.
Overall very happy with the service
Jack
Video Thumbnail
Everything was clear and explained perfectly
Kudzai Bought a Ford Focus
My experience was really great with these guys. Easy quick and effective. Kept me in loop all the way and got me finance approved when everyone else couldnt. Highly recommend them.
Harjinder

We only work with trusted partners and lenders

ClearScore
Compare the Market
Experian
Credit Karma